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Speaker 1: Good morning. I'm Brian Curtis.

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Speaker 2: And I'm Doug Prisner. Here are the stories we're following today.

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Speaker 1: The US Congress is still having to work on a

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Speaker 1: border package. ED Baxter is covering that story and more

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Speaker 1: from San Francisco. ED.

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Speaker 3: Yeah, that's because the Senate vote delivered a death blow

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Speaker 3: again or for now Brian efforts to impose new border restrictions.

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Speaker 4: On this vote, the Ya's are forty nine, the nays

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Speaker 4: are fifty three fifths of the senators duly chosen and

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Speaker 4: sworn not having voted in the affirmative. The motion is

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Speaker 4: not agreed to.

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Speaker 3: Yeah, see, they needed sixty vote. You can see how

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Speaker 3: bitterly from just that clip of how things are in

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Speaker 3: the Senate. But Seni Majority Leader Chuck Schumer says he

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Speaker 3: expects widespread support for a vote and a package for Ukraine, Israel,

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Speaker 3: and Taiwan aid divorced from the US border funding. Senate

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Speaker 3: Minority Leader Mitch McConnell, as well as calling for it now.

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Speaker 3: House Speaker Mike Johnson is trying to explain today how

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Speaker 3: his vote counting for yesterday Myorcus impeachment vote could have

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Speaker 3: gone so very very wrong.

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Speaker 5: Sometimes when you're counting votes and people show up when

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Speaker 5: they're not expected to be in the building, it changes

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Speaker 5: the equation. But listen, we have a duty and a

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Speaker 5: responsibility to take care of this issue. We have to

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Speaker 5: hold the Secretary of the Department of Homeland Security accountable.

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Speaker 3: Now, he says, the vote will come back when majority

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Speaker 3: with Steve Scalise is back, so it's not over. A

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Speaker 3: day after the move to impeach him the House failed,

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Speaker 3: Homeland Security Secretary of Majorcas is in Las Vegas making

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Speaker 3: sure the Super Bowl is a secure as possible. He says,

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Speaker 3: no credible threats at the moment, but.

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Speaker 6: Our counting weapons of mass destruction office has deployed cutting

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Speaker 6: edge detection technology to safeguard against the calamity that such

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Speaker 6: weapons can cause.

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Speaker 3: And says the impeachment charges against him come from Republicans

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Speaker 3: in disarray. Is that true?

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Speaker 7: Well?

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Speaker 3: R and C chair Rondi McDaniel stepping aside. What does

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Speaker 3: it do to the GOP? Does Nicki Haley have any

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Speaker 3: standing or is it all Trump now? Bloomberg's Nancy Cook

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Speaker 3: says for now, trying to give the image of now.

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Speaker 3: She does say there was a move to make Trump

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Speaker 3: the official nominee.

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Speaker 8: They should just already call Trump the presumptive nominee. They

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Speaker 8: should just move ahead, And there was pushback on that.

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Speaker 8: You know, the RNC had one of their big annual

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Speaker 8: meetings last week in Vegas, and there was a lot

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Speaker 8: of pushback on that that they needed to remain neutral,

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Speaker 8: and so I think that they are doing this for

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Speaker 8: near of neutrality. But at the same time, Trump is

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Speaker 8: basically like remaking the RNC behind the scenes to suit him.

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Speaker 3: So South Carolina's next, and of course there is a

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Speaker 3: possibility he could be convicted of something in the ninety

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Speaker 3: one counts out standing against him. Haley says she's still

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Speaker 3: in ISRAELI Prime Minister Benjamin Nettyah, who has rejected the

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Speaker 3: Hamas hostage release proposal. US Secretary of St. Anthony Blincoln,

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Speaker 3: who's in Israel, says the Helmas response does have some

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Speaker 3: non starters, but he'll continue working on a plan and

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Speaker 3: he will not give up. We're looking at it intensely

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Speaker 3: as is I know the government of Israel, and there

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Speaker 3: is a lot of work to be done, but.

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Speaker 8: We are very much focused on doing that work.

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Speaker 3: Now that Yahoo says Israel can achieve complete victory over

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Speaker 3: Hamas within months Global news twenty four hours a day,

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Speaker 3: whenever you want to with Bloomberg News. Now in San Francisco,

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Speaker 3: I met Baxter. This is Bloomberg Brian.

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Speaker 1: Thanks very much. Six minutes here past the hour Brian

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Speaker 1: Curtis and Doug Chrisner, and we look now at the

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Speaker 1: top business stories of the hour. China has replaced the

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Speaker 1: head of its securities regulator Bloomberg. Yvon Man has more

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Speaker 1: from Hong Kong.

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Speaker 9: Yihueiman has been replaced by Wu Ching as the new

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Speaker 9: Chairman and Party chief of the China Securities Regulatory Commission.

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Speaker 9: The abrupt dismissal of the fifty nine year old was

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Speaker 9: a surprise, as officials of his rank typically retire at

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Speaker 9: sixty five. The move may foreshadow more forceful measures by

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Speaker 9: President Chijiping's government. China has been trying to end a

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Speaker 9: route in the country's eight trillion dollars stock market. The

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Speaker 9: removal of Huiman echoes a move back in twenty sixteen,

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Speaker 9: when a market chief was also removed after a selloff

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Speaker 9: in Hong Kong. I'm Yvonne Mann, Bloomberg Radio.

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Speaker 2: Well today, Ali Baba reported disappointing sales for the fourth quarter.

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Speaker 2: These numbers reflect weak performance at Baba's core domestic e

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Speaker 2: commerce business. Now on the positive side, Ali Baba said

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Speaker 2: it would increase its stock buyback by twenty five billion

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Speaker 2: US over the next three fiscal years. Here's Bloomberg's Katherine

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Speaker 2: Limb from BI on why that didn't move the needle

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Speaker 2: with investors.

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Speaker 10: They are going to be spending more in twenty twenty four.

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Speaker 10: They've also highlighted that there are uncertainties in market conditions

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Speaker 10: that may actually hamper divestment plans, including the IPO of Tianyao.

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Speaker 10: So these were the two key things that actually stood

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Speaker 10: out that overshadow and large share buyback program by the company.

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Speaker 2: That is Bloomberg's Katherine Limb. Separately, ali Baba said it

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Speaker 2: did cut twenty thousand workers over the course of last year,

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Speaker 2: and the ADRs here in New York graded down nearly

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Speaker 2: six percent. Brian, Yeah, and it'll be.

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Speaker 1: Interesting to see how those shares trade later this morning,

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Speaker 1: once we get to the open, and we'll also be

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Speaker 1: getting that PPI and CPI data come in at the

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Speaker 1: bottom of the hour.

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Speaker 7: Well.

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Speaker 1: Shares in chip designer ARM rose as much as forty

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Speaker 1: two percent in late trading. The company gave a surprisingly

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Speaker 1: bullish forecast, showing its push beyond smartphones is fueling growth

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Speaker 1: and profitability. Revenue for the first quarter will be eight

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Speaker 1: hundred and fifty to nine hundred million dollars, and that

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Speaker 1: beats average analyst estimates of seven hundred and seventy eight million.

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Speaker 1: Executives said that the smartphone industry accounts for about a

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Speaker 1: third of the company's sales. The news sent ARM shares

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Speaker 1: on a startling rally, at one point up more than

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Speaker 1: thirty percent, finishing the late trading session up more than

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Speaker 1: twenty percent.

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Speaker 2: After the bell, we heard from Disney. The company reported

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Speaker 2: results for the fiscal first quarter above estimates, and the

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Speaker 2: company issued an upbeat profit outlook for the full year.

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Speaker 2: This is thanks largely it so some cost cutting along

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Speaker 2: with the strong performance of its international theme parks. Disney

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Speaker 2: is also boosting its cash dividend by fifty percent, and

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Speaker 2: the company is now targeting stock buybacks in fiscal twenty

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Speaker 2: four worth about three billion dollars to boot. Disney also

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Speaker 2: said it's going to invest about a one and a

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Speaker 2: half billion for an equity strike in Epic Games. Let's

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Speaker 2: take a closer look now at the Disney story with

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Speaker 2: our own Chris Pell Mary. He is Bloomberg team leader

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Speaker 2: for Media and Entertainment. He joins us from Los Angeles. Chris,

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Speaker 2: thanks for stopping by. How do you understand these numbers?

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Speaker 2: What's your take?

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Speaker 7: Well, you know, this was an initiative that CEO Bob

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Speaker 7: Iyer a house about a year ago, and they've said

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Speaker 7: they've cut seven and a half billion dollars in costs

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Speaker 7: out of business, a lot of layoffs ver seven thousand people.

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Speaker 7: But you're now seeing the results of that. From a

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Speaker 7: profit standpoint. The revenue is about it was flat sort

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Speaker 7: of the same period last year, but profits were up

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Speaker 7: nicely and in fact, they said and they expect earnings

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Speaker 7: for share for the whole physical year to climb about

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Speaker 7: twenty percent, and that's ahead of what analysts expected, which

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Speaker 7: is why you see the reaction of the stock.

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Speaker 1: How persistent will cost cutting be going out over a

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Speaker 1: number of years.

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Speaker 7: I think Iger has said that the cost cutting is

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Speaker 7: sort of over now. This is a period of rebuilding.

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Speaker 7: He came in a little more than a year ago

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Speaker 7: to retake this job, and his goal was to turn

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Speaker 7: the thing around, and his sort of first initiative was

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Speaker 7: to make the cuts in a company that sort of

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Speaker 7: spending had gone out of control, and you're now seeing

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Speaker 7: the benefits of that, and for example, huge reduction and

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Speaker 7: the losses in the streaming businesses of Disney, which had

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Speaker 7: been a huge drag, a billion dollar plus drag on earnings.

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Speaker 7: So he's now in the position of sort of strengthening

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Speaker 7: the movie and TV lineup and looking for strategic partners.

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Speaker 7: For example, the new sports service that they announced this week.

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Speaker 2: Yeah, I got to ask about that. So ESPN is

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Speaker 2: joining forces with Fox Corp. And Warner Brothers Discovery. This

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Speaker 2: is going to be a sports focused streaming service. I'm

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Speaker 2: going to like in it to Hulu for sports. Is

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Speaker 2: that a fair analogy?

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Speaker 7: It's exactly what people are calling it. Yeah, because if

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Speaker 7: you remember, Hulu began to NBC, ABC and Fox putting

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Speaker 7: their shows on the next day. So this is the

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Speaker 7: same content that you would see on ESPN or Fox

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Speaker 7: or on the Turner networks. But you'll pay a price,

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Speaker 7: some people suggesting forty to fifty dollars a month to

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Speaker 7: get that, and you know, obviously that's a little cheaper

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Speaker 7: than a cable bundle. But the company have all said

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Speaker 7: that this is not so much aimed at getting people

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Speaker 7: to cancel cable as picking up the people who just

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Speaker 7: haven't signed up for it. The court nevers. They call

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Speaker 7: them younger people who are sports fans and will pay

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Speaker 7: a monthly fee.

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Speaker 1: This is about seeing the content. When I first saw

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Speaker 1: this story, I thought, oh my, I wonder how that

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Speaker 1: will work on bidding. But they will not be bidding together, right,

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Speaker 1: Everything will stay the same in terms of bidding for

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Speaker 1: the rights.

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Speaker 7: Well, I think we're just beginning to see because Disney

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Speaker 7: and the other companies hadn't really disgusted with everyone the

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Speaker 7: reaction from some of the other players. We saw the

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Speaker 7: stocks of the local TV station owners take a big hit.

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Speaker 7: A company called Fubo that sells us sort of sports

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Speaker 7: online package took a big hit. We've seen sort of

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Speaker 7: a little bit of wariness on part of the sports

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Speaker 7: some of the sports leagues as they try to figure

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Speaker 7: all this out. Theoretically, at least the three companies would

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Speaker 7: still negotiate for their sports rights separately, and then you know,

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Speaker 7: whatever comes to that would be passed along to this

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Speaker 7: new streaming bundle.

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Speaker 2: Let me ask about Disney's announcement today that it's going

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Speaker 2: to invest one and a half billion for inequity stake

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Speaker 2: in Epic Games. Is what's the strategy here, Bob Iger.

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Speaker 7: Today, Disney's had its ups and downs with the video

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Speaker 7: game business. At one point they owned studios around the

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Speaker 7: country and had their own console game that they sold

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Speaker 7: and lost a lot of money and ended up getting

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Speaker 7: out of that business and instead just began licensing their titles,

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Speaker 7: you know, Star Wars whatever, to independent producers. This is

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Speaker 7: sort of a kind of a in between strategy on

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Speaker 7: that Epic Games has the Fortnite brand, which feels to

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Speaker 7: a lot of younger people that would sort of like

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Speaker 7: all of the Disney characters, the Marvel, Star Wars, Indiana Jones,

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Speaker 7: and so they're also taking an equity investment in Epic Games,

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Speaker 7: so they'll be licensing and in a way owning.

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Speaker 1: How strong is the activist pressure at the moment, Very strong.

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Speaker 7: We have two sets of activists who are trying to

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Speaker 7: see board seats at Disney. One is Nelson Pelps, who's

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Speaker 7: returning from last year. It's interesting that he gave up

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Speaker 7: a year ago right after an earning support where Bob

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Speaker 7: Iger announced all those cuts and jobs and restructuring, and

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Speaker 7: now that you're seeing the fruits of it. It's it

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Speaker 7: almost seems like a direct uh, you know, a stab

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Speaker 7: at Peltz, who's you know, Disney has rejected the activists,

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Speaker 7: and you know Iger, you know, is trying to show

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Speaker 7: here that you know, he has his strategy.

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Speaker 2: Yeah, we also have Blackwell's Capital as an activist. And

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Speaker 2: I was reading a note yesterday they essentially say that

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Speaker 2: it might be worthwhile for Disney to consider spinning off

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Speaker 2: for the theme park properties and basically chopping up the

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Speaker 2: company into three different units. Do you think that is

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Speaker 2: even feasible? Would would Iger even go along with something

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Speaker 2: like that?

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Speaker 7: You know, that's something I gre himself hinted it a

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Speaker 7: little way at last year. I know from Tom to

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Speaker 7: Tom people has suggested forming the real Estate Investment Trust

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Speaker 7: with all the theme parks and hotels as the company owns.

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Speaker 7: I was a little surprised that nobody asked any analyst

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Speaker 7: on the earning scout that I asked the management about that.

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Speaker 7: It might be a reflection of the fact that they

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Speaker 7: had so much other news or just said no one

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Speaker 7: is particularly taking that investor group seriously. They have a

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Speaker 7: very small position in Disney shares and so it doesn't

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Speaker 7: carry as much bunch as say Nelson Peltzon Chris.

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Speaker 1: You know, the company was under a lot of pressure

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Speaker 1: for a considerable period of time, both in terms of

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Speaker 1: the share price, its reputation, and then also from the

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Speaker 1: activist investors. But it seems like we're starting to hear

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Speaker 1: more now about it turning the corner. Is it safe

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Speaker 1: to say that Bob Iger is back on top?

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Speaker 7: You know he was that way you're hearing from investors, well,

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Speaker 7: I think you know, there's so much uncertainty in the

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Speaker 7: media landscape these days. If you look at Disney's portfolio,

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Speaker 7: you could certainly see concerns. The traditional TV business is

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Speaker 7: really declining at a double digit rate. Some of that

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Speaker 7: was related to the strikes last year in Hollywood, but

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Speaker 7: even this latest announcement of his sports streaming bundle has

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Speaker 7: a lot of people scratching their heads. There was not

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Speaker 7: a lot of details, and you know, there were many

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Speaker 7: issues that still remain. So although the stock is doing better,

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Speaker 7: I don't think anyone believes that Disney has really cracked

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Speaker 7: this whole new media landscape.

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Speaker 2: Is anyone concerned about the lack what appears to be

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Speaker 2: the lack of a succession plan right now? I mean,

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Speaker 2: Iger's not going to be around for much longer, is he?

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Speaker 7: A couple three years he re upped again, he always does.

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Speaker 8: You know.

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Speaker 7: He addressed succession issues, and you know there was you know,

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Speaker 7: they were continuing to explore. In the Disney's proxy, they mentioned,

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Speaker 7: I think the succession you know, group of the board

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Speaker 7: met four times last year and has hired an outside

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Speaker 7: recruiter and looking at internal and external candidates. So that

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Speaker 7: process continues, but isn't going anywhere anytime soon. It doesn't

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Speaker 7: look like.

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Speaker 1: One of the bright spots is always always seems to

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Speaker 1: be the parks, although during the pandemic that wasn't the case,

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Speaker 1: but you could understand it. We mentioned that global parks performed,

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Speaker 1: well what about domestic It's what.

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Speaker 7: Happened is you know me once they reopened, the theme

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Speaker 7: parks really surged and were a huge part of profits

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Speaker 7: and still our big power part of profits. Disney World

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Speaker 7: in Florida was flattish. Attendance was down. It speaks to

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Speaker 7: just an overall sort of you know, people done with

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Speaker 7: that sort of revenge travel. Uh and but disney Land

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Speaker 7: in California still did well. But any the big the

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Speaker 7: big jump profit wise was internationally. The parks in China,

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Speaker 7: for example, were closed for a long time due to

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Speaker 7: the pandemic, and that just more recently reopened.

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